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>In 1997, Apple was on the verge of bankruptcy [1] That experience deeply scarred the company's culture. Prior to that, Apple didn't hoard cash (relative to re

>In 1997, Apple was on the verge of bankruptcy [1] That experience deeply scarred the company's culture. Prior to that, Apple didn't hoard cash (relative to revenues). Afterwards, it did In 1996, Apple's market cap was ~$3B and they had about $1.7B in cash and short term investments.[1] That's over half the value of the company. If they had proportional amounts of cash today they would have a trillion dollars. I think the context of the talk about bankruptcy wasn't leverage like most companies have now, but simply that people might stop buying Macs and no revenue would be coming in. The hoarding of cash I associate with Fred Anderson, who was CFO from 1996-2004. [1]https://www.sec.gov/Archives/edgar/data/320193/0000320193-96-000023.txt https://www.sec.gov/Archives/edgar/data/320193/0000320193-96...

JumpCrisscross 6y ago
> That's over half the value of the company This is a sign of distress. The equity markets were attributing minimal value to the non-cash parts of the business. In 1996, Apple had about one fifth of its net turnover in cash. Today, it’s close to four fifths. Operating-to-operating metrics are a better indicator of management’s preferences than operations-to-markets.
- perl4ever 6y ago
  Well, they lost like $800 million in 1996, which is why the market value was low, but look at the preceding years. Going back to 1992, revenue was $7-11B and they had $1-1.5B in cash and short term investments.[1] So $1.7B was not that much different, and asserting they acquired the culture in '97 is plainly wrong. Having a lot of cash was a consistent theme. [1]See "Item 6. Selected Financial Data"
  - JumpCrisscross 6y ago
    > Going back to 1992, revenue was $7-11B and they had $1-1.5B in cash and short term investments ...which is closer to the 1996 ratio of cash to revenue than today’s.

JumpCrisscross 6y ago

> That's over half the value of the company This is a sign of distress. The equity markets were attributing minimal value to the non-cash parts of the business. In 1996, Apple had about one fifth of its net turnover in cash. Today, it’s close to four fifths. Operating-to-operating metrics are a better indicator of management’s preferences than operations-to-markets.

perl4ever 6y ago
Well, they lost like $800 million in 1996, which is why the market value was low, but look at the preceding years. Going back to 1992, revenue was $7-11B and they had $1-1.5B in cash and short term investments.[1] So $1.7B was not that much different, and asserting they acquired the culture in '97 is plainly wrong. Having a lot of cash was a consistent theme. [1]See "Item 6. Selected Financial Data"
- JumpCrisscross 6y ago
  > Going back to 1992, revenue was $7-11B and they had $1-1.5B in cash and short term investments ...which is closer to the 1996 ratio of cash to revenue than today’s.